Reliance Q3 result preview: Sequential improvement in PAT, EBITDA seen; updates on new energy business to be in focus

Reliance Q3 result preview: The oil-to-telecom-to-retail conglomerate Reliance Industries is set to announce its December quarter (Q3FY25) scorecard on Thursday, January 16. After two consecutive disappointing quarters, the company is expected to see a sequential recovery in key matrices. However, a firework is unlikely.

The last year has been tough for Reliance shares. The stock has been down about 9 per cent over the last year, mainly due to the unimpressive financial performance of its core oil-to-chemical (O2C) segment. However, the company's telecom and retail business have remained steady.

While increased digital offerings and monetization of its 5G network augur well for Jio, its retail segment is reaping the benefits of growing e-commerce and modern retail trends.

Mixed expectations

Experts expect Reliance Industries to announce a mixed set of numbers for Q3FY25, led by strong telecom earnings growth, improvements in refining margins, and moderate retail growth.

Prathamesh Masdekar, a research analyst at Stoxbox, expects the company's EBITDA to see a sequential 6 per cent improvement, mainly driven by earnings from more substantial refining margins and higher ARPU (average revenue per user) in digital services. However, year-on-year (YoY), EBITDA may remain flat, led by weakness in energy and more muted retail growth.

"These challenges are already well known, as management flagged that restructuring operations will remain a drag on retail earnings through Q4. Overall, we expect that increasing store footprint, operating leverage in Reliance Retail, net subscribers' additions from Jio, and petrochemical pricing will contribute to Reliance Industries' performance in Q3FY25," said Masdekar.

According to the estimates of brokerage firm Motilal Oswal Financial Services, Reliance's net sales may grow 2.5 per cent, and the reported PAT may climb 2.7 per cent YoY. The company's consolidated EBITDA may grow by 4 per cent YoY, said the brokerage firm.

"Further clarity on ₹75,000 crore announcements in the new energy business, growth in retail store additions, and any pricing action in telecom are the key monitorable," the brokerage firm said.

Brokerage firm Nuvama Wealth Management sees a 4 per cent YoY growth in the company's Q3FY25 revenue.

Nuvama estimates Reliance's consolidated EBITDA to see a sequential improvement of 2.6 per cent, mainly due to earnings improvement in the Jio and retail segments.

However, Nuvama expects a 1.5 per cent YoY decline in the company's Q3 EBITDA due to weak performance from the O2C segment.

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